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(Bloomberg) — Meta Platforms Inc. Chief Executive Officer Mark Zuckerberg has promoted his top policy executive, Nick Clegg, to an even greater role inside the company — a move that will mean less involvement in future policy decisions for the CEO and Chief Operating Officer Sheryl Sandberg. 

Clegg was already running Meta’s global policy organization, but Zuckerberg said in a post Wednesday that he will now “lead our company on all our policy matters,” including interactions with governments and how Meta will “make the case publicly for our products and our work.” Clegg, who was reporting to Sandberg, is now reporting to Zuckerberg too, with the new title of president for global affairs. 

“We need a senior leader at the level of myself (for our products) and Sheryl (for our business) who can lead and represent us for all of our policy issues globally,” Zuckerberg wrote. 

Clegg’s elevated role means that Zuckerberg and Sandberg will defer to Clegg more on policy decisions. Zuckerberg, in particular, has spent more time in recent years on issues like content moderation and regulation than he would like, according to sources familiar with his thinking. That has included many discussions around issues like political advertising and how to handle high-profile users, like former President Donald Trump. 

Zuckerberg would rather dedicate more time to Meta’s technology and products — areas where he is more experienced — including plans to build a new immersive version of the internet known as the metaverse, say people familiar with his thinking.  

Clegg’s promotion may also help Zuckerberg avoid making public statements on day-to-day policy issues, which haven’t done much to improve Facebook’s trust with the public. As CEO, he’s still likely to be the one called before U.S. Congress when lawmakers seek a top executive to testify.

“As Nick takes on this new leadership role, it will enable me to focus more of my energy on leading the company as we build new products for the future, and it will support Sheryl as she continues to focus on the success of our business,” Zuckerberg wrote. 

Meta shares declined 3% to $214.18 at 1:47 p.m. in New York.

Clegg, 55, joined Meta in late 2018 at a crucial time for the company, formerly known as Facebook. It was still reeling from the aftermath of Facebook’s unexpected role in the 2016 U.S. presidential election, and was facing increased scrutiny from politicians and regulators for data and privacy practices following the Cambridge Analytica scandal. 

Meta is once again preparing for high-stake elections with the 2022 midterms in November. It will be the first major vote in the U.S. since Trump refused to accept his 2020 loss and pushed other Republicans to question the integrity of the results. Meta and other social media companies will have to make tough calls about what content to take action against and what to leave alone in an election when all 435 seats in the House are up for grabs, as well as 34 of the 100 Senate seats.

As a former politician — he was Deputy Prime Minister in the U.K. from 2010 to 2015 — Clegg brings a new perspective to Meta’s senior leadership team. In his three years on the job, he’s developed a close relationship with Zuckerberg, and taken the lead on many of the company’s most important decisions. He spearheaded Meta’s effort to create an independent Oversight Board to help make content decisions, and also shepherded the company’s process for reviewing and ultimately suspending Trump’s Facebook and Instagram account following the Jan. 6 Capitol riots. 

Now Clegg will be tasked with selling Meta’s new product vision for the metaverse to regulators. “The next few years will be a crucial time for our company and our industry as new rules for the internet are written all over the world, and as we set out on our journey to help build the metaverse,” Sandberg wrote in a post. “Nick’s calm and principled leadership will continue to be an asset for Meta in the months and years to come.”

Meta is also restructuring its public relations group following the departure of John Pinette, the former vice president of communications in early January. David Ginsberg is being promoted to head of communications and public affairs. Ginsberg, who has been at Meta for almost five years, was previously running the company’s choice and competition team, which focuses on building products to meet new and expected regulation, like data transfer and portability features.

That group will continue to report to Ginsberg, as will a new Global Public Affairs team under Tucker Bounds. In an internal company post shared Wednesday, Clegg said that Ginsberg’s new team will be restructured further in the future. 

(Adds context about Zuckerberg’s role in sixth paragraph)

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(Bloomberg) — Two of Donald Trump’s biggest would-be competitors in social media said they have spoken with the former president ahead of the launch of his Truth Social platform. 

Speaking at the Pivot MIA conference in Miami Beach Wednesday, the chief executive officers of Parler and Gettr said they had both kept up a relationship with Trump and that they thought that there was enough room in the market for all three platforms.

Jason Miller, the former Trump adviser who now runs Gettr, said he would be meeting with the president later Wednesday and that he wasn’t worried about competition from his former boss.

“I’m actually looking forward to it,” Miller said. “I’m going to see the president this afternoon. I’ll make the pitch again to say @realDonaldTrump is all reserved and ready for you.”

He said he would encourage Trump to be on multiple platforms.

Parler CEO George Farmer generally agreed about the size of the market.

“Jason probably has talked to him as much as I have talked to him,” Farmer said. “We’ve had meetings with the Trump Organization.”

Both companies pitch themselves as forums for free speech, and are popular with Trump supporters who say their views are no longer welcome on traditional platforms. Parler in particular gained a reputation for far-right hate speech, and has been subject to scrutiny related to the Jan. 6 U.S. Capitol attack. Gettr, which emerged after the attack, similarly pitches itself as an alternative to traditional social-media companies.

Miller said that the announcement of Truth Social actually coincided with a bump in new signups on his platform. He said conservatives stepped off social media when Trump was removed from Twitter, according to his research, and said they have started to come back. 

He said waves of signups generally coincide with Trump announcements or moves from traditional platforms to remove people.

Parler’s Farmer said the company was also expanding into areas where Trump wouldn’t be a direct competitor, including what he calls “crypto social,” including non-fungible tokens.

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(Bloomberg) — The Bank of Canada’s former No. 2 argued the country needs to build framework to make cryptocurrency “as safe as our financial system.”

Carolyn Wilkins, in an opinion piece Wednesday for the Financial Post newspaper, said the cryptocurrency space is advancing in a largely unregulated way, with few guardrails for financial stability, investor protection and market integrity. That means it’s not “entirely safe,” she said. 

To address this, Canada needs “clear and proportionate legal and regulatory frameworks,” she said, adding the nation can look to efforts by the Bank of England and other global peers for its regulatory response. (Wilkins is now a member of the U.K. central bank’s financial policy committee.) 

“Canada needs to be as ambitious in creating modern legal, policy and regulatory frameworks for the crypto ecosystem,” said Wilkins, who was senior deputy governor at the Bank of Canada from May 2014 to December 2020. “If done well, we just might realize the promise of reinvention and expansion for those who rely on efficient and trustworthy financial services.”

Her comments come a week after Conservative lawmaker Michelle Rempel Garner called on Prime Minister Justin Trudeau’s government to start taking digital currencies seriously. Rempel Garner’s proposed law would task the finance minister with setting up a national framework to woo investors. Financial executives are also pushing the government to act on crypto, in part to help diversity the nation’s resource-heavy economy.

There’s been an increase in scrutiny of digital currencies in Canada due to fundraising in Bitcoin by some organizers of the trucker convoy that’s been occupying Ottawa for nearly three weeks. In invoking emergency powers to quell the protests Monday, Finance Minister Chrystia Freeland said the government will specifically target crypto platforms as part of its bid to choke off the flow of money to the demonstrators. 

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(Bloomberg) — While much of the Western world is cheering the waning effects of the Covid-19 pandemic, some companies whose businesses were most affected by global lockdowns are seeing a return to normal in a different light.

Roblox Corp., a social platform that enables players to create their own online games and worlds, captured the attention of as much as two-thirds of U.S. kids ages 9 to 12 during the pandemic. Its shares soared 130% last year. That success also made the company vulnerable when tweens were called back to classrooms, sports and other activities. 

Reality caught up with Roblox this week when it reported financial results that missed analyst’s estimates and acknowledged it’s tough to compare growth rates with last year when certain metrics doubled or even nearly tripled. The stock on Wednesday fell the most since the company went public last March, tumbling as much as 26% in New York.

“The whole reopening thing is somewhat of a drag” for Roblox, said Bloomberg Intelligence analyst Mandeep Singh. Time spent on the internet increased about 25% in the last three years compared with pre-pandemic levels. “You’re not going to see that with reopening,” he said.

Shopify Inc., a Canadian e-commerce company that provides software and other services that underpin the websites of many small businesses, told a similar story. The company grew dramatically during the early stages of the pandemic, with sales jumping 86% in 2020. But its business started to stumble last year. Results failed to meet estimates in the third quarter, the first time it disappointed analysts since its 2015 initial public offering, as merchants did less business across its platform than expected.

Fourth-quarter results were better, but the company projected a reset in online spending this year.  

“The Covid-triggered acceleration of e-commerce that spilled into the first half of 2021 in the form of lockdowns and government stimulus will be absent from 2022,” Shopify said Wednesday. “There is caution around inflation and consumer spend near term, for the full year.”

Airbnb Inc. has experienced success on both sides of the pandemic, but that outcome wasn’t obvious in the early days of 2020. When global travel came to a halt two years ago, the vacation-rental platform cut thousands of jobs and considered delaying its initial public offering. In May of 2020, Airbnb forecast revenue for the year to be less than half of what it was in 2019.

But after the initial shock, business boomed as workers no longer had to be in traditional offices five days a week and could work from anywhere. “As a result,” Airbnb said in a letter to shareholders on Tuesday, “people are spreading out to thousands of towns and cities, staying for weeks, months or even entire seasons at a time.”

Chief Executive Officer Brian Chesky said 2021 was “the best year in our company’s history,” and that Airbnb was able to weather the pandemic because of its highly adaptable business model. Fourth-quarter revenue and profit beat analysts’ estimates and the company is starting the year stronger than before the pandemic. Shares jumped as much as 6.5% Wednesday.

DoorDash Inc. is another company that has seen its fortunes ebb and flowed with the pandemic. The meal-delivery company flourished when restaurants were forced to shutter, delivering favorite dinners — and lunches — to people cooped up at home and helping keep restaurants afloat. But even as dining out has become an option again, DoorDash has found that those Covid-habits have stuck.

In the third-quarter, DoorDash revenue increased 45%, beating estimates. The company, which now comprises 58% of the U.S. food-delivery sales, has parlayed its success with restaurants into other delivery categories like convenience and grocery, elevating its ambitions to becoming a logistics giant.

The company reports fourth-quarter earnings Wednesday after the market closes. 

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(Bloomberg) — U.S. officials said Wednesday that Russian state-backed hackers have been targeting U.S. defense contractors for the last two years, acquiring “sensitive” information, including about weapons development.

The hackers have used “common but effective tactics,” including the harvesting of user credentials and spearphishing attacks, to gain access to large and small defense contractors, according to a statement from the National Security Agency, the Federal Bureau of Investigation and the Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency.

The hackers have managed to maintain access to the companies, sometimes for as long as six months, by using legitimate credentials as well as a variety of malicious software, according to the agencies. In instances where attackers successfully gained access to companies, U.S. officials said there was “regular and recurring exfiltration of emails and data.” The alert did not identify the affected firms by name.

The Russian Embassy in Washington did not immediately respond to a request for comment. 

During one breach last year, hackers stole hundreds of documents related to an unnamed company’s products, relationships with other countries and internal personnel and legal matters.

The attacks have focused on “cleared” defense contractors, meaning organizations granted clearance by the Defense Department to access, receive and store classified information to bid on contractors or conduct activities in support of Defense Department programs.

The intrusions enabled the hackers to acquire “sensitive unclassified information,” in addition to defense contractors’ proprietary and export-controlled technology, according to the statement. 

“The acquired information provides insight into U.S. weapons platforms development and deployment timelines, vehicle specifications and plans for communications infrastructure and information technology,” according to the U.S.

The contractors were targeted from at least January 2020 to this month.

 

 

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(Bloomberg) — Cryptocurrencies and deep-fake technology are sending chills throughout the U.S. government, with cyber crooks embracing digital innovations so rapidly that law enforcement can barely keep up, according to the Federal Bureau of Investigation. 

“Crypto is the primary currency, the primary vehicle, to facilitate extortion payments. It’s the only game in town,” Bryan Vorndran, assistant director of the FBI’s Cyber Division, said in a Bloomberg virtual panel discussion on cybersecurity Tuesday. “We all know the blockchain offers us some opportunities, but the ability to pay crypto, script it immediately into a tumbler, whether through an extortion payment or theft, is a huge, huge challenge for us.”

Criminals love Bitcoin in particular because it’s effectively unhackable and, unlike cash, can be transferred in large amounts almost instantly without ever touching the banking system. For those reasons, the virtual token is almost always the form of payment demanded in ransomware attacks, such as those using malware to paralyze computer networks. 

Last May, a Russia-linked group later identified as DarkSide crippled Colonial Pipeline Co. until the company paid almost $5 million in cryptocurrency. The following month, U.S. officials said they recovered 63.7 of the 75 Bitcoin involved. 

Meatpacker JBS SA and even the Washington police department are among the other organizations victimized by ransomware groups.

The FBI discourages companies from submitting to extortion because, it argues, the funds serve only to embolden bad actors and augment their capabilities.

Recently, the bureau has developed evidence suggesting that criminal gangs in Russia and Eurasia have set up call centers to professionalize their ransomware businesses, and are sharing data gathered from victims, Vorndran said.

A growing area of concern for officials is so-called synthetic content, colloquially known as “deep fakes.” Advances in computing technology have leapfrogged from lab settings into the real world, allowing criminals to deceive, misinform and defraud by impersonating others. Vorndran said such technology and it’s potential to erode democracy is one of the things that keeps him up at night.

“When you look at biometric authentication, facial recognition, digital footprints, mimicking voices, these things are huge, huge challenges to law enforcement, to the intelligence community in the next 5-10 years,” he said. “The synthetic content piece is something that is a fascinating discussion but also a very, very scary discussion.”

One persistent problem for the U.S. government is the lack of reporting by companies and other organizations when cyberattacks happen. The reasons for that hesitancy range from ignorance to mistrust of the government’s motives.

Vorndran said the government estimates it has data on only 20% to 25% of domestic cyber breaches, a data set too small to be very useful, especially when trying to anticipate what adversaries will do next. Joining him in urging more cooperation from the private sector is Eric Goldstein, the executive assistant director for cybersecurity at the Cybersecurity and Infrastructure Security Agency, or CISA.

“The best thing we can do as the U.S. government to help resolve hesitation is by showing value, is by showing organizations that by engaging with CISA, engaging with the FBI, they will get information, expertise, support, the ability to collaborate seamlessly across sectors, that can help them to protect their enterprise and help them to protect their customers,” said Goldstein, who also participated in the Bloomberg panel.

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(Bloomberg) — Cryptocurrencies and deep-fake technology are sending chills throughout the U.S. government, with cyber crooks embracing digital innovations so rapidly that law enforcement can barely keep up, according to the Federal Bureau of Investigation. 

“Crypto is the primary currency, the primary vehicle, to facilitate extortion payments. It’s the only game in town,” Bryan Vorndran, assistant director of the FBI’s Cyber Division, said in a Bloomberg virtual panel discussion on cybersecurity Tuesday. “We all know the blockchain offers us some opportunities, but the ability to pay crypto, script it immediately into a tumbler, whether through an extortion payment or theft, is a huge, huge challenge for us.”

Criminals love Bitcoin in particular because it’s effectively unhackable and, unlike cash, can be transferred in large amounts almost instantly without ever touching the banking system. For those reasons, the virtual token is almost always the form of payment demanded in ransomware attacks, such as those using malware to paralyze computer networks. 

Last May, a Russia-linked group later identified as DarkSide crippled Colonial Pipeline Co. until the company paid almost $5 million in cryptocurrency. The following month, U.S. officials said they recovered 63.7 of the 75 Bitcoin involved. 

Meatpacker JBS SA and even the Washington police department are among the other organizations victimized by ransomware groups.

The FBI discourages companies from submitting to extortion because, it argues, the funds serve only to embolden bad actors and augment their capabilities.

Recently, the bureau has developed evidence suggesting that criminal gangs in Russia and Eurasia have set up call centers to professionalize their ransomware businesses, and are sharing data gathered from victims, Vorndran said.

A growing area of concern for officials is so-called synthetic content, colloquially known as “deep fakes.” Advances in computing technology have leapfrogged from lab settings into the real world, allowing criminals to deceive, misinform and defraud by impersonating others. Vorndran said such technology and it’s potential to erode democracy is one of the things that keeps him up at night.

“When you look at biometric authentication, facial recognition, digital footprints, mimicking voices, these things are huge, huge challenges to law enforcement, to the intelligence community in the next 5-10 years,” he said. “The synthetic content piece is something that is a fascinating discussion but also a very, very scary discussion.”

One persistent problem for the U.S. government is the lack of reporting by companies and other organizations when cyberattacks happen. The reasons for that hesitancy range from ignorance to mistrust of the government’s motives.

Vorndran said the government estimates it has data on only 20% to 25% of domestic cyber breaches, a data set too small to be very useful, especially when trying to anticipate what adversaries will do next. Joining him in urging more cooperation from the private sector is Eric Goldstein, the executive assistant director for cybersecurity at the Cybersecurity and Infrastructure Security Agency, or CISA.

“The best thing we can do as the U.S. government to help resolve hesitation is by showing value, is by showing organizations that by engaging with CISA, engaging with the FBI, they will get information, expertise, support, the ability to collaborate seamlessly across sectors, that can help them to protect their enterprise and help them to protect their customers,” said Goldstein, who also participated in the Bloomberg panel.

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(Bloomberg) — A group of 21 industry groups aligned with the automotive and technology sectors is calling for Congress to finalize work on a bill to fund increased domestic chip production.

Congress in 2021 authorized federal spending on research and design initiatives to boost domestic chip production and create a subsidy for domestic manufacturers. But the money still needs to be included in an appropriation measure before it can be doled out.

“It is essential Congress act swiftly to provide funding to make this law a reality,” the groups wrote in a letter to U.S. House Speaker Nancy Pelosi, Senate Majority Leader Chuck Schumer, House Minority Leader Kevin McCarthy and and Senate Minority Leader Mitch McConnell. 

A global semiconductor shortage that traces its origins back to the beginning of the Covid-19 pandemic in the spring of 2020 has hampered U.S. car manufacturing and increased prices for consumers. Carmakers are competing with other makers of other electronic devices affected by the shortage, such as computers and mobile phones, for chips that have remained scarce for more than a year. 

“Our global competitors are investing heavily in semiconductor manufacturing and research, and continued inaction by the U.S. risks placing our country further behind in the competition for economic growth, supply chain resilience, technology leadership, and strengthened national security,” the letter continued. 

Among the signatories of the letter is the Business Roundtable, CTIA, Motor & Equipment Manufacturers Association, North America’s Building Trades Unions, USTelecom, and the Chamber of Commerce. 

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(Bloomberg) — Roblox Corp. tumbled in its worst decline on record after a disappointing earnings report, marking a departure from the double-digit share gains the quarterly updates typically spur for the video-game company.

The 26% slump on Wednesday is the biggest decline for Roblox in the session following its results. In November, the stock surged 42% after the company reported third-quarter bookings, a measure of sales, that topped analysts’ estimates even as Covid-19 restrictions eased.

Yet, in its fourth-quarter report released after markets closed Tuesday, Roblox reported bookings that fell short of Wall Street estimates. The company also posted bookings for January, which analysts said were weak and signaled decelerating growth. 

“Our prior view assumed RBLX would continue to grow users and bookings at outsized rates through reopening. We were wrong,” Morgan Stanley analysts led by Brian Nowak wrote in a note, downgrading the stock to equal-weight from overweight.

Roblox jumped 21% on May 11 after posting its first quarterly report as a public company. In August, when bookings missed Wall Street estimates, the stock slipped just 1.1%. 

Besides Morgan Stanley, other analysts remained unmoved by the report. Roblox has 16 buy ratings, three holds and one sell, according to data compiled by Bloomberg. Firms including Bank of America Corp. and Needham & Co. have touted the company’s growth potential for the metaverse.

The average price target among analysts tracked by Bloomberg is $104, implying nearly 90% return potential for the next 12 months. Roblox shares are up 23% since the company made its public debut in March.

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(Bloomberg) — Investors looking to historical data for clues on whether Bitcoin’s current slump is drawing to a close may be disappointed to see that price rebounds have tended to lag those posted by the stock market.

The largest digital currency by market value rarely sits within a close range of its all-time highs, according to data complied in a report by Bitooda Holdings Inc. By comparison, major U.S. stock indices seldom fall below a 10% correction from record highs. The S&P 500 and Nasdaq Composite have only experienced two brief bear markets since 2014, including one at the onset of the pandemic.

During that same time period, Bitcoin sustained lengthy drawdowns before hitting new heights, and currently sits in its fourth major dip. The cryptocurrency has hit a record-high 124 times since 2014, while the S&P and Nasdaq reached fresh highs 483 and 482 times respectively, according to Sam Doctor, Bitooda’s head of research.

Bitcoin’s most recent peak of almost $69,000 in November was achieved during an easy-money environment, with regulators dropping interest rates as the coronavirus pandemic threated financial stability, according Steve Sosnick, chief strategist at Interactive Brokers LLC. Now, as the Federal Reserve signals rate hikes to curb inflation, the token could have a more difficult path upwards, digging itself out of a rout.

“It will require more patience,” Sosnick said by phone. “I don’t see the same type of circumstances where money is just going to flood in the way we saw before.”

Bitcoin was down less than 1% to $43,650 as of 11:54 a.m. in New York.

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